What Affects Your Auto Insurance Premium in Québec

Why don't you pay the same premium as your neighbour, who drives the very same car? The Autorité des marchés financiers (AMF) asks that question itself, and the answer comes down to one idea: the premium reflects each insurer's estimate of the risk you represent. Your record, your vehicle, how you use it, where it is kept and the protections you choose all go into that calculation.

This guide reviews those factors, without figures, since their weight varies from one insurer to another. Above all, it separates what you can act on from what does not depend on you.

Each insurer sets its own rates

According to the AMF, insurers are free to use the classification criteria and set the premium levels they consider appropriate. The Automobile Insurance Act does, however, require them to file the rate manual they use with the AMF, which analyzes their practices. The result is a point the AMF states plainly: the price of insurance can vary from one insurer to another for exactly the same coverage and the same conditions. That is what makes comparing quotes worthwhile.

Your driving record

Your driving record at the Société de l'assurance automobile du Québec (SAAQ) contains, among other things, the status of your licence, your demerit point regime and the points accumulated, the offences committed, the conditions added to your licence and your driving experience. According to the SAAQ, you can obtain your own record free of charge, and an insurer can request it with your consent.

A few SAAQ rules worth knowing:

• demerit points remain on your record for two years from the date of conviction, for sanction purposes;
• the threshold that leads to revocation of the licence depends on the licence and on age: 4 points for a learner's or probationary licence, 8 points under age 23, 12 points at 23 and 24, 15 points from age 25;
• accumulated points increase your insurance contribution, and therefore the annual cost of your licence;
• under reciprocity agreements, points received in Ontario, Maine and New York State can be entered on your record as if the offence had been committed in Québec.

On the insurer's side, the AMF indicates that a premium can be lower if you have held a licence for several years and have not committed any traffic offences. Each insurer nevertheless decides which period it looks at and how much weight it gives each offence.

Your claims history

Insurers have access to the Fichier central des sinistres automobiles, the central auto claims file. According to the Groupement des assureurs automobiles (GAA), this file, which belongs to the AMF and which the GAA manages, lists the losses in which each insured has been involved over the past six years, whether or not a claim was made. A loss is attributed to a single person, the custodian of the vehicle (gardien du véhicule): the person behind the wheel at the time of the accident, or the person who had custody of the vehicle if it was damaged or stolen with no driver.

The GAA states that a claims-free record can give access to preferred rates, while an insured involved in several losses over the past three years may represent a higher risk for the insurer. The AMF, for its part, lists having had no accident, whether or not you were responsible, among the elements that can lower the premium.

You can obtain a copy of your claims record from the GAA, online, by mail or in person. If you find an error in it, the GAA can check the information with the insurer, which alone can change it.

The vehicle

According to the AMF, the premium varies with the make, the model, the year of manufacture, the vehicle's value, the engine's power, the cost of replacement parts and even the number of doors. For certain models frequently targeted by thieves, the AMF states that insurers may require an anti-theft or tracking device to be installed for the vehicle to be covered against theft; that is the purpose of Q.E.F. No. 45, a warranty applicable to theft of the entire vehicle. The AMF suggests asking whether the insurer will pay for the installation or whether it will lower the premium.

This is a factor over which you have real latitude, but only at the time of purchase: asking for a quote before choosing a vehicle tells you how the model affects the premium.

Use and distance driven

The AMF notes that a premium can be lower if you drive short distances and do not use your vehicle for work, for example to visit clients. These statements must stay accurate. The AMF recommends informing your insurer of any new situation that could increase the risk, including:

• a job that now requires you to use your vehicle for business;
• a new job that makes your trips longer;
• frequently lending your vehicle to another driver;
• carrying passengers for pay;
• a move or a major improvement to the vehicle.

If you offer your services as a driver or a delivery person, the AMF reminds you that you must inform your insurer. Standard endorsements exist for these uses, such as Q.E.F. No. 48 for remunerated passenger transportation and Q.E.F. No. 48a for a goods delivery enterprise.

Where the vehicle is kept

According to the AMF, the risk of theft is not the same in every neighbourhood or every region, and the premium varies with where you live. Your address and postal code are therefore part of the calculation. The Q.P.F. No. 1 specifies that the town or city and province of the address shown in your Declarations (conditions particulières) are where the vehicle is mainly used, stored and parked; if that is not the case, for example while you study away from home, it must be declared.

Age, sex and experience

The AMF names age and sex among the criteria: if you belong to a segment of the population that makes more claims, that is reflected in the cost of insurance. Experience also counts, measured in particular by the number of years since you obtained your licence. These factors cannot be changed in the short term; it is time, together with a clean record, that moves them.

Protections, deductibles and other elements

What you buy directly affects the premium: the amount of civil liability under Chapter A, the Chapter B protections, the deductibles and the endorsements. (The English version of the policy calls the chapters Section A and Section B.) According to the AMF, a person covered only for civil liability pays less than a person also covered for damage to their vehicle, and the higher the deductible, the lower the premium. Reducing a protection, however, also reduces what the insurer will pay after a loss.

The AMF mentions other elements that may count, depending on the insurer: the credit record, which some insurers take into account, and possible discounts for having auto and home insurance with the same insurer, insuring two vehicles, an anti-theft system, several years at the same address, a hybrid vehicle or using the insurer's website. The payment method can also matter: ask whether monthly payments involve fees and compare the total annual cost. As for telematics, the AMF states that the data collected on your driving can lead to a discount or, on the contrary, to a price increase.

What you can change, and what you cannot

Factor	What the insurer looks at	Your room to act
Driving record	Offences, demerit points, years licensed	Real, with time and careful driving
Claims	Entries in the Fichier central des sinistres automobiles	Limited: the file covers the past six years
Vehicle	Make, model, year, value, power, cost of parts	Real at the time of purchase
Use and distance	Work, business, distance driven	Real, provided you declare the facts
Location	Address, neighbourhood, region	Low
Age, sex, experience	Customer segment, years of driving	None in the short term
Protections and deductibles	Chapters A and B, deductibles, endorsements	Direct
Payment and bundling	Payment method, other contracts with the same insurer	Direct

If your record is heavy

Several offences or losses can make it harder to find insurance. According to the GAA, it has the mandate to guarantee the civil liability insurance required by law, whatever the risk an insured represents, and its Information Centre can help if you cannot find insurance. The GAA also administers a risk-sharing plan (Plan de répartition des risques): drivers who represent a higher risk are insured collectively by all insurers through it, while continuing to deal with the insurer of their choice.

At renewal, take the time to check

According to the AMF, if your insurer wants to change your contract, for example by raising the premium, it must notify you 30 days before renewal; without a written notice or a request for changes on your part, the contract renews at the same price and for the same term. That is the time to review your statements (distance, drivers, use), to ask what explains an increase and to compare. The AMF also states that if you want to switch insurers, you must notify your insurer before the end date of the contract, failing which fees will apply.

Declare the facts, always

It can be tempting to underestimate the distance you drive, to name as principal driver someone who rarely drives or to keep quiet about an accident. The Q.P.F. No. 1 requires you to report any information that may influence the risk, and the Civil Code of Québec requires the client to declare the known circumstances likely to materially influence the insurer. A misrepresentation can lead to the cancellation of the chapter concerned or to a reduced indemnity, at the very moment you were counting on your insurance. For new drivers, see our guide to young driver auto insurance; for the effect of the deductible, the one on the deductible.

We explain; the quotes come from licensed partners.

Sources

• Autorité des marchés financiers (AMF), lautorite.qc.ca: how the price of auto insurance is determined, how to limit problems with auto insurance, telematics, drivers and delivery people, claims records, Québec's auto insurance program and rating, endorsement forms.
• Groupement des assureurs automobiles (GAA), gaa.qc.ca: Fichier central des sinistres automobiles, guaranteeing access to auto insurance.
• Société de l'assurance automobile du Québec (SAAQ), saaq.gouv.qc.ca: demerit points, obtaining a driving record.
• Automobile Insurance Act (Loi sur l'assurance automobile, CQLR, chapter A-25) and Civil Code of Québec, LégisQuébec, legisquebec.gouv.qc.ca.